December 20, 2004 (PLANSPONSOR.com) - Edward D.
Jones & Co. has settled with the Securities and Exchange
Commission, the New York Stock Exchange, and the National
Association of Securities Dealers over charges of promoting
certain mutual funds without disclosing that they were paid
money by firms wishing to get on the list.

The brokerage has agreed to pay $75 million in fines, a
deal that the SEC still must approve. The agency’s
enforcement department has approved it, however, according
to CBS MarketWatch.

The charges stem from the company’s practice of
promoting “best funds” without telling investors that it
takes money from firms hoping to get on the list. The
practice is allowed, but not if investors are not informed
and if fund companies have used fund assets to improperly
cover trading commissions, MarketWatch reported.

Separately but in a related move, California attorney
general Bill Lockyer filed suit against the brokerage over
the practice, according to
a statement
on Lockyer’s Web site. The complaint charged that seven
mutual fund companies – including American Funds, Federated
Investors, Goldman Sachs Group, Hartford, Lord Abbett,
Putnam Investments and Van Kampen Investments – paid to get
on favorable lists at the company. Lockyer alleged
that Jones collected around $300 million in payments from
the funds.